Question
Davis acquires 100% of Ramos on January 1, 2009, Ramos will be operated as a separate subsidiary. Davis will use the equity method to account
Davis acquires 100% of Ramos on January 1, 2009, Ramos will be operated as a separate subsidiary. Davis will use the equity method to account for its investment in Ramos. In 2013, Davis has a net income of $400,000 and pays dividends of $100,000. Ramos has a net income of $200,000 and pays dividends of $75,000. At the acquisition date, Davis has a building with a book value of $3,000,000 and a fair value of $4,000,000. At that date, Ramos had a building with a book value of $800,000 and a fair value of $900,000. Both buildings have a remaining useful life of 10 years (assume straight-line depreciation). On Dec. 3, 2013, Davis had a book value of building of 5,000,000 and a Fair Value of 6,000,000, Ramos had book value building of 2,000,000 and a fair value of 1,500,000
(remember useful life of 10 years)
d. How much are consolidated buildings on December 31, 2013
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started